Schools are being urged to let poorer pupils jump the queue for places in return for hundreds of pounds in extra funding per child.

Ministers are inviting schools and councils to abandon admissions rules which forbid selection on the basis of family finances and give low-income families priority over the middle-classes.

Each lower-income child who is admitted under the initiative would bring ‘pupil premium’ funding to the school – worth £900 next year.

Priority: Schools are being urged to give poorer pupils places first in return for hundreds of pounds of extra funding per child

The move is being championed by David Laws, the new Liberal Democrat schools minister, who hopes to curtail so-called ‘selection by mortgage’, where families can improve their chances of getting into a popular school by buying a home nearby.

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The plans risk provoking a middle-class backlash and accusations of social engineering.

David Laws is for the the move and hopes to curtail 'selection by mortgage'

Schools would be allowed to discriminate in favour of children who attract ‘pupil premium’ funding because they are on free school meals - or have been registered for free meals at any time over the last six years.

Children are eligible for free meals if their parents are on a range of benefits or the family’s annual income is less than £16,190. Up to 1.77million children attract the pupil premium.

The Coalition has already altered the admissions code to enable self-governing academies and free schools to prioritise children who attract the premium.

It is now considering extending the freedom to all state schools. They would have ‘discretion’ over how much priority they give to pupil premium children.

An Education Department spokesman said: ‘We are determined to narrow the unacceptable gap in attainment between children from different backgrounds.’